Time to Get Ready for a Tech Rally?

With four weeks of gains now behind us, some experts are writing of a sustained rally heading into next month's meeting of the Federal Reserve. Why? Stimulus. Traders and more than a few Big Money investors are betting the Fed will boost stock returns. Anticipation led the markets higher.

The tech-centric Nasdaq Composite led the gainers with a 1.78% jump over the prior five trading days. Small caps also surged as the Russell 2000 gained 1.66% while the S&P 500 rose 1.07%. Blue chips fared worst as the Dow Jones Industrial Average advanced just 0.85% last week, CNBC reports.

Notable newsmakersInterestingly, the rally came on the heels of not-so-good news from China. Exports rose just 1% year over year in July. Economists were expecting a much more robust 8.6% gain. Bankers and regulators there may have no choice but to employ their own brand of stimulus now that the Sino Superpower has suffered six consecutive quarters of declining economic growth.

In Europe, at least one big-name stock went nowhere. English football club Manchester United (NYSE: MANU) priced its IPO at $14 a share, below its intended range of $16 to $20 apiece, and the stock ended the week precisely where it started. Don't expect much in the way of future returns, either; IPO proceeds not set aside to offset losses will go to paying down debt. An emerging growth story this isn't.

Here in the U.S., we still don't have a complete picture of what went wrong at Knight Capital. Hysteria's on the loose anyway, thanks in part to pundits misinterpreting a neat graphic that shows the rising influence of high-frequency trading systems. Rather than showing actual trading volume, the graphic, published by researcher Nanex, reveals a sharp increase in the number of equities seeing action from computer-based trading systems.

Tech poppers and floppersMeanwhile, week 32 of the Big Idea Portfolio saw massive gains from Rackspace Hosting (NYSE: RAX) , which beat expectations and announced meaningful progress in deploying its OpenStack infrastructure for serving new customers.

Nearly all of the company's most important metrics showed gains. Returns on capital improved by 1.1 percentage points year over year as revenue per server jumped 43.3% and cloud computing installments fed 22.8% of overall revenue. Intense competition with the likes of Amazon.com is doing nothing to stunt the growth of this business.

Source: Yahoo! Finance. *Tracking began at market close on Jan. 6, 2012. **Adjusted for dividends and other returns of capital.

Apple added another $6 a share and 1.5% on expectations for its forthcoming iPhone and iOS. Stifel Nicolaus analyst Aaron Rakers last week initiated coverage of the stock with a buy rating and an $825 price target. His assessment of Apple's off-balance-sheet transactions suggest a massive inventory buildup that might include the long-rumored big-screen Apple television display.

And if the rumor proves false? It may not matter. A recent ChangeWave survey found "unprecedented" demand for the iPhone 5. Roughly 14% of respondents said they were very likely to buy the device. Can you imagine how that ratio will jump once they get to see what Apple has planned? Billions of dollars in worldwide iPhone sales seem likely at this point.

Finally, Salesforce rallied more than 9% for the week after Bloomberg published a mostly positive profile of the company that also teased a forthcoming human resources service called Work.com. The move puts Salesforce even more at odds with legacy software suppliers such as SAP (NYSE: SAP) , which in December acquired online HR services supplier SuccessFactors.

Shares of Salesforce are up again today on a Piper Jaffray report that says the company has landed a new deal worth at least $140 million, the largest sale in company history and a likely catalyst for raising revenue and earnings guidance.

What do you expect to see when Salesforce reports fiscal second-quarter earnings on Aug. 23? What about at next month's Dreamforce conference? Use the comments box below to let us know what you think.

See you back here over the weekend for more tech stock talk. In the meantime, why not take advantage of a new premium report on Apple that details the opportunities and challenges in store for shareholders? The research includes a full year of updates, but only if you act now. Get your copy today.

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